News Brief

5/23/2014, Iyar 23, 5774

Fitch Affirms Israel's "A" Rating

Fitch Ratings affirmed, Friday Israel's "A" credit rating. Fitch cited Israel for its fiscal consolidation and narrowing of budget deficits. A statement by the agency said, "Debt is relatively high, at 67.4% of GDP at end-2013 compared with the 'A' median of 52.3% of GDP, but it is forecast to stay on a downward trend."

Fitch also noted, "The start of gas production has caused a structural improvement in the balance of payments that will support continued current account surpluses, which are forecast to average 2.6% of GDP over 2014 and 2015." It also forecast "Rising global demand should support export growth despite the impact of currency appreciation, and investment should benefit from greater housing construction."

Regarding matters that are not purely economical, Fitch said, "A high level of geopolitical risk is factored into Israel's rating. Current regional conflicts are assumed to continue, but their impact on Israel not to worsen materially." Fitch did not expect a military conflict between Israel and Iran or exclude the possibility of renewed conflict with Hamas in Gaza, and did not assume any breakthrough in the peace process with the Palestinian Authority.